Ouch! Is anyone listening?

More bad news from the ratings agencies. Moody’s issued its new rating for Alaska’s general obligation debt, downgrading us from Aaa to Aa1, with a continued negative outlook. This comes on the heels of Standard & Poor’s, which lowered the state’s outlook from “stable” to “negative” last year and kicked it down another notch in January from AAA to AA+ as it warned Alaska to get its financial house in order. Fitch, the state’s third rater, has Alaska on a negative market watch.  “The gap has been growing — the oil prices have been unrelenting in their decline,” noted Gabe Petek, S&P’s chief Alaska analyst. “We don’t operate oblivious to how policymakers are proceeding in their thinking about how to plan for the upcoming budget year.”

From Fitch: “Fitch will resolve the Watch after analyzing the state’s enacted budget for fiscal 2017, which begins on July 1. The ‘AAA’ rating would likely be assigned a Negative Outlook or downgraded if, in Fitch’s view, enacted budget measures do not support appropriate levels of long-term financial flexibility relative to the state’s revenue structure.”

Click here to see all the rating reports and the governor’s response.